Regional hotels experienced a stellar year in 2014, outperforming their London counterparts, according to Hotel Britain 2015 – the latest annual report by business advisory and accountancy firm BDO.
Average occupancy for the regions was up 2.3% to 75.1% for the year – the highest occupancy since the compilation of BDO’s Hotel Britain statistics began in 2004. Average room rate for the regions was up 7.7% on 2013 to £60.71 – pushing rooms yield up by 10.2% to £45.60.
The regional success story continued with a rooms yield compound annual growth rate (CAGR) of 3.9% for 2010-2014 overtaking London for the first time since 2001-05.
London
Set against the backdrop of 4% increase in supply, London hotels still maintained a very respectable 82.6% average occupancy rate for the year and a 0.9% increase in average room rate to £148.42 – beating the 2008 peak of £137.47. As a result, rooms yield grew by 0.7% to £122.61.
Transactional activity
Reflecting the strong figures, transactional activity in the hotel sector also increased to £6.1bn – up 13% on 2013 and the highest figure since 2006.
Robert Barnard, partner at BDO, said:
“The UK hotel sector has had a phenomenal year. Regional hotels have outperformed their London counterparts for the first time in 14 years, proving that the economic recovery is not just felt in the South East. Hotels in London have also appeared to have recovered their pre-recession performance with strong occupancy, despite an increase in supply.
“International visitors to the UK increased by 5.8% to 34.8m in 2014, and VisitBritain predicts another bumper year ahead. Expenditure in the UK is also expected to grow to £22bn. All in all it’s clear that hotels across the UK have begun 2015 on a strong foundation.”
About Hotel Britain
Hotel Britain is the definitive guide to the performance and prospects of the UK’s hotel industry. It is compiled from the responses of a representative cross section of 656 hotels comprising 82,371 rooms, and including 147 London hotels and 509 around the rest of the country. The results of this survey are grouped by key centres across the country and analyse both London and the regions in terms of average room rate.
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